On August 6, US President Donald Trump announced a plan to apply 10 percent tariffs on Canadian aluminum imports using national security as the justification. The President had previously issued the tariffs on Canada in March of 2018 as a negotiating tactic for the new CUSMA agreement. After successful negotiations with Canada, the 10 percent tariff was removed in May of 2019. Today, September 15, notice was issued that the tariff would not go into force as previously announced.
The tariffs are a tax a country imposes on imported goods. This specific tariff was to be applied against goods that fall under 7601.10 of the Customs Tariff. 7601.10 covers unwrought aluminum, not alloyed. Any imports matching this description from Canada would be subject to a 10% tariff. The purpose of this tariff is to raise the price of Canadian unwrought aluminum to make domestic aluminum more desirable. President Trump stated that Canada exceeded the levels agreed to during the CUSMA negotiations and as such the tariffs would go into affect on August 16.
The Government of Canada immediately denounced the move stating that the US needs Canadian aluminum as domestic production does not meet current demand. Canada released a list of goods that they will draw from to subject to a retaliatory 10% surtax after a 30 day consultation period with stakeholders. Based on the results of the consultation, Canada was planning on announcing the tariff this week. However, now that the US has not moved ahead with the tariff, Canada will likely not issue any tariffs on US goods.
The United States Trade Representative issued a report stating that they expect levels imports of Canadian aluminum to slow during the remainder of the year as the reason for the withdrawal of the tariff. With the upcoming election in November, the President seems to be doing as much as possible to retain the Presidency. If President Trump wins again in November, you can be sure this won’t be the last we hear of potential tariffs on imports.